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Lobster Ltd produces four products and is currently planning its production mix for the coming year. The following information relates to next year: Product A
Lobster Ltd produces four products and is currently planning its production mix for the coming year. The following information relates to next year: Product A (Rs) Product B (Rs) Product C (Rs) Product D (Rs) Selling price per unit 50 64 106 88 Material cost at Rs2 per kg 12 36 20 24 Labour cost at Rs10 per hour 30 20 70 50 Maximum Demand 5000 units 5000 units 5000 units 5000 units Required: Prepare the optimal production plan and determine the total contribution under each of the following two assumptions: (a) If labour hours are limited to 50,000 next year (12 marks) (b) If materials are limited to 110,000 kgs next year
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